7 weeks of decline - and counting

The US stock markets have been falling for 7 weeks in a row. From the point of view of the Fibonacci Count, at 3, 5 and 8 respectively there’ll be some significant turns to be expected.

In the last issue we indicated that the markets might be facing a turn since a five week decline had passed. But by falling short of certain marks on daily basis (1294 in the S&P 500 or 12093 in the Dow Jones, respectively) an eight week decline with a target of 1250 in the S&P 500 and 11800 in the Dow should be waiting.

The weekly 8 Candle GUNNER24 Up of the S&P 500 is showing that for next week the touch of an extremely important price and time magnet is on the agenda which should ring in a significant upwards turn. A weekly closing price below this magnet would point to a 13 week decline. But at the moment we’re working on the assumption that after being touched the magnet a visible turn should happen which we’ll buy then.

It’s been going downwards for 7 weeks. From my point of view, the fact that not any white candle is visible during the decline shows its corrective character. The S&P 500 might still go a little bit lower producing a marginal new low in the 1250 environment or confirming the existing low (1258) before a contact of the market with the support Gann Angle (it will proceed at 1258 next week) will be able to ring in the rebound.

The odds are extremely in favor of a significant rebound to happen here in the environment of the support Gann Angle. A reversal candle would be the first sign for a rebound. Correspondingly, in case of a reversal candle we’ll go long towards the week closing. In case of the 1258 low or if next week even a lower low is being generated SL will be at that new lower low. Target is the 5th double arc being the Main Target for the entire move. The first important resistance where the first stop of the rebound on daily basis will have to be expected is lying at 1298.

As well as in the S&P 500, the actual daily 3 Candle GUNNER24 Up at the Dow Jones is indicating that the low of this correction might have been reached already. Perhaps even the low narrowly below 11800 we had expected originally will be reached – but not necessarily!

What we can recognize here is a classic example how much some stocks or even entire markets are subject to the temporal influence of a double arc. In retrospect – since the May high the Dow Jones “had to” follow the downwards pressure of the 3rd double arc. We clearly recognize how each contact and every penetration into the 3rd double arc has resulted in further downwards phases. On Wednesday the low of this decline will possibly have been marked at the support Gann Angle anchored in the setup outside right.

For the second time the Dow closed within the 3rd last Friday. That’s another sign for the possible end of the decline. Monday through Thursday will still be lying within the temporal influence of the double arc. The appearance and the character of that influence are not foreseeable. The prices are often pulled down within the lines of a double arc, and frequently within the lines a short-term counter move takes place. The courageous traders might go long in the environment of the support Gann Angle on Monday. SL is below the permitted June low. We’ll buy the Dow in case of a significant break of the 3rd double arc with first target 12300.

The rebound from the previous June low should proceed pretty choppy; many resistances are lying above the price: Beside the horizontal one at 12072 above all it’s the resistance Gann Angle which should brake each new rebound possibly resulting in a new test of the support Gann Angle.

Gold and silver are in front of so-called time leaps!

No great things have happened since we analyzed gold for the last time. After I presented the weekly 13 Candle GUNNER24 Up on 06/05 gold has lost as little as 3$.

Gold has stayed in its narrowly defined weekly Gann Angle corridor. For the second time it closed within the 2nd double arc last week newly confirming the next main target at 1666. As observed in the last analysis the 2nd above the price continues being a powerful resistance area which can only be passed tenaciously. Actually, strong rises are not possible. Little higher highs are, but there’s a serious threat: The resistance area of the 2nd might show its true colors sending gold to travel to the horizontal supports below the price. But gold is maintaining its position very well. Generally speaking we can make out a consolidation at the highs. But to become ready for long-term long commitments we’ll have to wait for a significant upwards-break of the 2nd – not likely at all in the next future. Or we’ll wait for an entry on a low price level which is more probable!

To the time leap and the Hidden Arc now:

No great signal – just a short-term one on daily basis – without much potentiality upwards – well, that’s something at least.

We’re applying a GUNNER24 Down at the all-time high. We’re working with the elliptical setup dragging it down to the right until the blue arc left-hand simultaneously touches the lows of the eight other candles emphasized in the setup, by the close of the forth candle. Friday closed exactly underneath the clearly visible yellow resistance Gann Angle which was rejected five times already. But on Monday we may expect an opening at 1540 or narrowly above that. Thus, Monday is supposed to open above the yellow resistance Gann Angle for the first time, so to speak skipping temporally over that resistance and just theoretically opening some potential until the next higher Gann Angle which proceeds at 1551.5 for Monday.

A clue for all the GUNNER24 Gold Traders: We’ll have to wait and see the reactions again there… If a strong rebound takes place gold will keep well to the resistance which might even be broken. In addition we recognize until which moment the Hidden Arc is going to provide temporal support. That will be the case until the 06/29 with the actually existent contact points. A daily close below the Hidden Arc would be a short signal. But before that the daily lows could be used for further long commitments exactly on the Hidden Arc or near it, respectively.

The expected time leap will be confirmed if gold opens at the 1540 maintaining its position there during two to three hours or even being quoted above that. In that case we might enter in the course of Monday at the moment of a little downwards counter reaction – maybe at 1535 or so. An opening at 1537 or similar, I mean clearly below the yellow Gann Angle would deny the long-trade for the moment, then an alert will be mailed.

Silver also skips over a „brutal“ resistance! That turns the mood positively at the beginning of the week (maybe even until Wednesday).

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